Correlation Between REGAL ASIAN and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and AstraZeneca PLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining REGAL ASIAN and AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and AstraZeneca PLC, you can compare the effects of market volatilities on REGAL ASIAN and AstraZeneca PLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in REGAL ASIAN with a short position of AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and AstraZeneca PLC.
Diversification Opportunities for REGAL ASIAN and AstraZeneca PLC
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REGAL and AstraZeneca is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC and REGAL ASIAN is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on REGAL ASIAN INVESTMENTS are associated (or correlated) with AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between REGAL ASIAN and AstraZeneca PLC
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 1.09 times less return on investment than AstraZeneca PLC. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 1.0 times less risky than AstraZeneca PLC. It trades about 0.01 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,335 in AstraZeneca PLC on September 14, 2024 and sell it today you would earn a total of 525.00 from holding AstraZeneca PLC or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. AstraZeneca PLC
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| AstraZeneca PLC |
REGAL ASIAN and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and AstraZeneca PLC
The main advantage of trading using opposite REGAL ASIAN and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, AstraZeneca PLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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